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Friday June 2nd, 2023

Sri Lanka’s progress on GSP+ commitments: top EU officials says report due soon

ECONOMYNEXT – The European Union will assess progress made on Sri Lanka’s commitments for the 500 million US dollar GSP+ trade concession “very soon”, with a report due to be released later this year or early 2023, European Commission President Ursula von der Leyen has said.

Sri Lanka President Ranil Wickremesinghe’s office said Monday October 03 morning that von der Leyen had made this reference to the EU’s assessment of Sri Lanka’s commitments in a statement she had made on Sri Lanka.

Sri Lanka’s access to the Generalised Scheme of Preferences Plus (GSP+) concession has been under review for extension as the country failed to adhere to several of the commitments it had made, mainly with regard to human rights.

GSP+ is an annual trade concession worth over 500 million US dollars which has boosted Sri Lanka’s exports to EU member states over the years mainly in the garments sector, a top forex earner for the island nation.

The president’s media division (PMD) said that von der Leyen had congratulated President Wickremesinghe on his election and has assured the EU’s support to the government of Sri Lanka for its efforts to successfully overcome the country’s prevailing currency crisis.

According to the PMD, the EU commission chief’s statement has said that, at a time of unprecedented challenges faced by the people of Sri Lanka, the European Union remains committed to support Sri Lanka’s efforts to overcome the crisis successfully, including the necessary reforms that will bring the country back to a path of inclusive prosperity and lasting national reconciliation.

She had said that, this process, freedom of expression and assembly, dialogue among all stakeholders, as well as respect for the rule of law and fundamental rights will remain essential.

The EU has stressed on several occasions that Sri Lanka needs to uphold its commitments, particularly with regard to eradicating human rights violations in the country. Of particular concern to the EU has been Sri Lanka’s controversial Prevention of Terrorism Act (PTA), an anti-terror law that critics have called draconian.

In June 2021, the European parliament adopted a resolution calling for the repeal  of the PTA and inviting the EU Commission to consider temporarily withdrawing Sri Lanka’s access to GSP+.

More recently, a spate of arrests of anti-government protestors by police since the election of President Wickremesinghe has drawn international criticism, especially with regard to the detention of three activists under provisions of the PTA. The government, however, maintains that all arrests so far have been legal and were of individuals accused of offences such as damaging public property.

The PMD statement said von der Leyen had “commended the success in the efforts to introduce and steer policies that will ensure the short and long-term interests of all Sri Lankans and address the devastating efforts of the unprecedented economic downturn as well as the negotiations with international financial institutions and creditors.”

She has also expressed an interest in working closely to strengthen further the ties and cooperation, based on commitments to shared values and common interests, the statement said.

In August, British High Commissioner to Sri Lanka Sarah Hulton said Sri Lanka will benefit from the UK’s new trade concessionary scheme Developing Countries Trading Scheme (DCTS) that will replace the GSP+ in that country and will be in force from 2023.

Related:

Sri Lanka to benefit from access to UK’s new trading scheme: high commissioner

(Colombo/Oct03/2022)

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Sri Lanka to ramp up weekend fuel deliveries after petrol price cut

More deaths reported at Sri Lanka fuel queues

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Petroleum Corporation will be operating on the weekend to complete all fuel deliveries to end vehicle queues forming outside fuel stations after the price revision earlier in the week, Energy Minister Kanchana Wijesekera said.

“Instructions have been given to CPC and Ceylon Petroleum Storage Terminals to continue fuel deliveries on Saturday and Sunday this week to supply sufficient stocks to all fuel stations,” Minister Wijesekera said in a TWITTER.COM MESSAGE

“To reduce expenses on overtime, CPC and CPSTL have not been operating on Sundays and public holidays in the last 4 months,” Wijesekera said.

“Non-placement of orders by fuel stations from last Saturday, anticipating a price reduction, not maintaining minimum stocks, immediate increase in demand by consumers after the price revision, and quota increase have created shortages in the fuel stations.”

The Minister in April 2023 said all fuel stations would be required to maintain a minimum of 50 percent of stock tank capacity.

“I have asked CPC to review and suspend the license of fuel stations that had not maintained minimum stocks.” (Colombo/ June 02/ 2023)

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Sri Lanka bonds yield up at close, rupee at 291.75/292.50 against the US dollar

ECONOMYNEXT – Sri Lanka’s bonds closed steady on Friday, dealers said, following the central bank’s decision to cut its main policy rate by 250 basis points.

The Spot US dollar closed at 291.75/292.50 rupees, dealers said.

The rupee opened at 290.25/75 to the US dollar Thursday and closed at 292.50/295.50 to the US dollar.

A bond maturing on 15.09.2027 closed at 24.70/90 percent up from 24.50/90 percent a day earlier, dealers said.

A bond maturing on 15.05.2026 closed at 25.75/26.25 percent up from 25.00/26.00 percent a day earlier.

A bond maturing on 01.05.2025 closed at 27.00/30 percent, up from 26.30/27.00 per cent at last close.

A bond maturing on 01.07.2032 closed at 20.25/21.00 percent, up from 20.00/40 per cent at last close.
(Colombo/ June 02/2023)

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Sri Lanka’s shares edge up on positive macroeconomic sentiments

ECONOMYNEXT – Sri Lanka’s shares closed higher in trade on Friday, over positive macro-sentiments encouraging investors to redeem their interest towards buying, an analyst said.

The main All Share Price Index was up 0.72 percent or 62.19 points to 8,753.80,  while the most liquid index S&P SL20 was up 0.68 percent or 16.87 points to 2,487.29.

Sri Lanka’s inflation in the 12-months to May 2023 has eased to 25.2 percent from 35.3 percent a month earlier according to a revised Colombo Consumer Price Index calculated by the state statistics office.

Prior to the Monetary Policy investors were quite optimistic that inflation is to lower and interest rates will decrease and since exp, an analyst said.

Sri Lanka Central Bank is waiting for the government proposal on the domestic debt restructuring (DDR), the central bank governor Nandalal Weerasinghe said amid uncertainty over DDR and speculations over instability in the banking sector.

“On debt restructuring, the borrower is the ministry of finance’s treasury. Certainly we will announce what the strategy will be. We are waiting for a government proposal,” Weerasinghe said.

Sri Lanka’s investors are waiting on assurances to be made on debt restructuring and optimization, Central Bank Governor Nandalal Weerasinghe said, “It is up to the government to clear the uncertainty, because from our side we have done that part.”

The central bank cut the key policy rates by 250 basis points to spur a faltering economic growth as inflation was decelerating faster than it projected.

The speculation of DDR has hit the market and the risk premium has kept the market lending rates well above the central bank’s policy rates. The government has yet to present its plans on DDR.

Weerasinghe said the central bank has done its best to reduce the risk premium through bringing down the market lending rates while keeping the policy rates unchanged.

Sri Lanka’s President Ranil Wickremesinghe has discussed progress of International Monetary Fund program and debt restructuring during a visit of Deputy Managing Director Kenji Okamura, statement said.

“The discussion primarily focused on the progress of the IMF program between Sri Lanka and the IMF,” a statement from President’s office said.

“Attention was also paid to the on-going debt restructuring negotiations.”

However Officials from IMF have said Sri Lanka has to focus on expanding taxes.

“We discussed the importance of fiscal measures, in particular revenue measures, for a return to macroeconomic stability,” Deputy Managing Director Kenji Okamura said in a statement.

The finance ministry this week issued rules requiring everyone above 18 year of age to register to pay income tax.

“I was encouraged by the authorities’ commitment to negotiate a debt strategy in a timely and transparent manner.

The market generated a revenue of 738 million rupees, while the daily average was 1 billion rupees.

Top gainers in trade were Vallibel One, LOLC Finance and Browns Investment. (Colombo/June02/2023)

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